SUNDERMUL AND CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Income-tax Appellate Tribunal referred to this court at the instance of the assessee the following question :

(2.) This question arose on the following facts : The assessee, a registered firm carrying on business as financiers, failed to make a return for the year 1961-62 for which the relevant accounting period was Diwali year commencing from November 1, 1959, and ending on October 20, 1960. A notice under section 22(4) calling for the production of accounts was issued on November 29, 1961, and the date of hearing was fixed as December 13, 1961. On that day the assessee did not appear. A second notice under section 22(4) was issued on January 22, 1962, and on the date of hearing, on February 5, 1962, application for adjournment was filed, but no one appeared. Adjournment was refused and the Income-tax Officer made an ex parte assessment under section 23(4) on February 8, 1962, on a total income of Rs. 80,000 in view of the assessees default in complying with the notice issued under section 22(4).

(3.) Against the order of rejection, the assessed filed an appeal before the Appellate Assistant Commissioner. He has also filed an appeal against the assessment order made under section 23(4). Both these appeals were heard by the Appellate Assistant Commissioner and while rejecting the appeal against the order of rejection of the application under section 27, the Appellate Assistant Commissioner took into consideration the statement of profit and loss and the trial balance filed by the assessee in appeal in support of the income shown in his return and after perusing the previous record held that Rs. 80,000 assessed by the Income-tax Officer was excessive and, therefore, reduced it to Rs. 40,000.